(Photo: The Canadian Press)
Faced with falling global sales and a falling stock price, Tesla has again cut prices on some of its electric vehicles and its “Full Self Driving” system in an apparent bid to revive profit growth of the company.
But Wall Street was not impressed and will wait for further answers from CEO Elon Musk when Tesla releases a report on its first-quarter financials after the U.S. stock market’s closing bell on Tuesday. Many industry analysts estimate that a sales decline of nearly 9% in the first three months of 2024 raises questions about demand for Tesla’s and other electric vehicles.
For Elon Musk, the answer appears to be the long-elusive robotaxi, which he has touted as a growth catalyst for Tesla since the necessary hardware went on sale in late 2015. Elon Musk has called the system “Full Self Driving,” even though the company admits on its website that it cannot drive itself and that humans must be ready to take control at any time.
In 2019, Elon Musk promised a fleet of autonomous robotaxis by 2020 that would bring income to Tesla owners and increase the value of their cars. Instead, they have declined with price cuts as autonomous robotaxis have been delayed year after year while being tested by owners while the company collects road data for its computers.
Now, Elon Musk seems to be betting that the unveiling of a new robotaxi model on August 8 will be the catalyst his company needs to return to meteoric annual sales growth.
Industry analysts are skeptical and fear that Elon Musk has canceled or delayed plans for the Model 2, a new small Tesla aimed at the mass market that would cost around US$25,000. Analysts surveyed by FactSet expect the company’s first-quarter net income to fall 42% from a year earlier, to $1.46 billion.
Over the weekend, however, Tesla slashed the price of Models Y, S and It also reduced the cost of “Full Self Driving” by a third, to US$8,000.
On Monday, as investors digested the price cuts, Tesla shares fell another 3.4%, bringing the year-to-date decline to just under 43%. Year to date, however, the S&P 500 is up about 5%.
In a note to investors Monday, John Murphy, an analyst at Bank of America Global Research, wrote that Tesla shares have been under pressure since the start of the year due to declining electric vehicle sales and a production exceeds demand.
“We remain skeptical about Tesla’s growth prospects, but we also see opportunities as the company unveils its future growth drivers (robotaxi and Model 2) in the coming months,” wrote John Murphy, adding that he maintained a neutral rating on the stock.
On Sunday, Elon Musk wrote on X, the social media platform he owns, that like other automakers, Tesla’s prices change frequently “in order to match production with demand.”
From January to March, Tesla manufactured 433,371 vehicles and delivered 386,810 ― even after cutting prices of some of its most expensive models by as much as US$20,000 last year.
Last week, Tesla announced it would cut 10% of its 140,000 employees, and Andrew Baglino, senior vice president of powertrain and energy engineering, announced he was leaving the company after 18 years of service. The company also announced that it would ask its shareholders to reinstate US$56 billion in compensation for Elon Musk, which had been rejected by a Delaware court.
John Murphy wrote that on Tuesday he expects Elon Musk and the company to give some guidance on the robotaxi, and may also reiterate plans to begin manufacturing the Model 2 in 2025 or 2026.
For years, Elon Musk has been telling owners and investors that Teslas with “Full Self Driving” software and hardware will be able to drive themselves and make money carrying passengers when they normally would have been parked.
But so far, “Full Self Driving” is nothing more than a partially automated driver assistance system that cannot drive itself.
Early last year, the U.S. National Highway Traffic Safety Administration asked Tesla to recall its “Full Self-Driving” system because it can misbehave at intersections and doesn’t always comply with road limits. speed. Tesla’s less sophisticated Autopilot system was also recalled to strengthen its driver monitoring system.
However, some experts don’t think a camera-only system like Tesla’s could ever achieve full autonomy.
Sterling Anderson, product manager and co-founder of Aurora Innovation, a company that makes autonomous driving systems for tractor-trailers, said his company uses laser and radar sensors in addition to cameras.
Sterling Anderson, the former director of Tesla’s Autopilot system, recently reported that Aurora’s laser sensor, also called lidar, was able to spot a pedestrian along a Texas highway more than 1,000 feet away. darkness. The truck’s cameras were only able to see the person from about 50 meters away, making the situation more dangerous.
“There is no ambient light to illuminate this pedestrian,” Sterling Anderson said. Therefore, any optical system, including cameras or human eyes, that relies on other light to reflect off an object will fail at this kind of task.”
Laser and radar sensors can see well beyond the truck’s headlights. “The question is safety, robustness and reliability,” Sterling Anderson said.
Raj Rajkumar, professor of computer and electrical engineering at Carnegie Mellon University, recalled that Tesla relies on cameras that are trained on huge data sets. But computers can’t predict every scenario encountered on the roads, and even if they could, “tomorrow there will be new scenarios that aren’t in the data set,” he said. .
Elon Musk once said that lidar isn’t necessary because humans can drive with their eyes alone. “Humans don’t shoot lasers from their eyes to drive,” he wrote on X on Sunday.
